How often have you gone for an oil change expecting a $50-$100 bill but ended up paying much more for additional services like wiper replacements, air filters, or brakes? Buying a house in British Columbia can be similar—it's more than just the purchase price. Understanding the true cost of buying a home before you get an accepted offer is crucial.

Knowing these costs in advance can prevent surprises and ensure you have enough money for a rainy day, avoiding last-minute scrambles to gather funds for closing. Here are the costs to consider in 2024.

Subject Removal Costs When Buying a Home in BC

When you have an accepted offer and it's time for due diligence, there are certain costs you should be aware of:

1. Property Appraisal – $300-$450 plus GST. Hired by your lender to confirm the home's value. Often required if you put less than 20% down. Sometimes covered by your mortgage broker, but budget for it anyway.
2. Home Inspection – $400-$800 plus GST depending on the home's size. Paid to the inspection company at the time of inspection. Waiving this is not recommended.
3. Deposit – Typically 5% of the purchase price, paid within 24 hours of an accepted offer or subject removal. Held in trust until completion day and forms part of your down payment.

Closing Costs When Buying a House in BC

After subject removal and closer to completion, your lawyer or notary will prepare a statement of adjustments for you to review your debits and credits. Here are the main costs to consider:

1. Balance of the Purchase Price – The purchase price minus your initial deposit. Most of this comes from your lender as your mortgage.
2. Lawyer/Notary Fees – Varies depending on the purchase price and lawyer/notary, typically $1300-$2200.
3. CMHC Insurance Premium – If you have less than a 20% down payment, this premium is added to your mortgage balance and monthly payments.
4. Title Insurance – Often included in legal fees, around $250-$400.
5. Fire and Property Insurance – $50-$200 per month. Crucial and often mandatory.
6. Strata Documents – Up to $100-$200 if required for a rush.
7. Strata Move-in Fee – Varies, typically $100-$300 but can be up to $500.
8. Property Survey Certificate – May be required by lenders, starting from $500 plus GST.
9. Home/Fire Insurance – Required by lenders, effective on completion or when funds are in trust.
10. Property Transfer Tax (PTT) – Calculated as:

• 1% on the first $200,000
• 2% on the portion above $200,000 up to $2,000,000
• 3% on the portion above $2,000,000
• Additional 2% on the portion above $3,000,000 if residential
• First-time home buyers may be exempt up to $8,000 for purchases under $835,000.

11. Foreign Ownership PTT – Additional 20% if the title is transferred to a foreign entity.
12. Property Tax Adjustment – Based on the move-in date relative to the annual payment date.
13. Adjustments for Utilities/Condo Fees/etc. – Reimbursement to the seller for prepaid fees.
14. Adjustments for Rentals and Security Deposits – Credited to the buyer if applicable.
15. GST – 5% on new homes with potential rebates for homes up to $450,000.

The Foreign Buyer Tax applies to foreign buyer purchases in the following regions:

• Capital Regional District
• Fraser Valley Regional District
• Metro Vancouver Regional District
• Regional District of Central Okanagan
• Regional District of Nanaimo

The additional property transfer tax doesn’t apply to properties located on Tsawwassen First Nation lands.

*Note: As of January 1, 2023, there is a Canada-wide foreign buyer ban in effect for a total of TWO years. 

What You Need to Pay For After Closing

• Moving Expenses – $1,000+
• New Furniture – Varies
• New Locks – Varies
• Household Goods – Varies
• Utility Connection Charges – Varies
• Redecorating and Renovating Costs – Varies
• Immediate Repair and Maintenance Costs – Varies
• Elevator or Move-in Deposit – Refundable by strata

Be Aware of Buyer Tax Exemptions!

Three common tax exemptions that can help reduce home-buying costs are:

1. First-Time Home Buyer Property Transfer Tax Exemption
2. New Built Property Transfer-Tax Exemption
3. Newly Built Home Exemption
4. GST New Home Rebate

For instance, the PTT exemption for first-time buyers can save up to $8,000 for homes under $830,000. Knowing these exemptions is crucial as they can significantly impact your overall costs.

Hiring a realtor can provide invaluable guidance through the costs, exemptions, and options that could save you money when buying a home.

Did you know hiring a realtor to help you buy is a FREE service?

While this blog covers various costs of buying a home, one thing that doesn't cost you a dime is hiring a Realtor to guide you through the home-buying process.

When making one of the largest investments of your life, it's crucial to have someone on your side to protect your interests.

A realtor helps you estimate costs, understand the responsibilities of homeownership, write and negotiate contracts, and navigate the purchasing process.

I have build a solid reputation and experience in this industry so let me help you in your home buying goals. Reach out to me today at info@arpitbajaj.ca or 778-707-0020 for realtor representation!